Hygeia II

Environmental & Social Review Summary

This Environmental and Social Review Summary is prepared and distributed in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board of Director’s decision. Board dates are estimates only.
Any documentation which is attached to this Environmental and Social Review Summary has been prepared by the project sponsor and authorization has been given for public release. IFC has reviewed this documentation and considers that it is of adequate quality to be released to the public but does not endorse the content.

Project number	26806
Country	Nigeria
Sector	Health Care
Department	Health and Education
Company name	Hygeia Nigeria Limited
Environmental category	B
Status	Pending Disbursement

Date ESRS disclosed	May 19, 2009

Previous Events	Signed: June 29, 2009 Approved: June 25, 2009

View Summary of Proposed Investment (SPI), click here

Overview

Category & Applicable Standards

Key Issues & Mitigation

Community Engagements

Client's Documentation

Overview of IFC's scope of review

In 2007 IFC undertook an in-depth review for the current investment in HNL which included site visits and meetings with various client representatives. In addition, a supervision visit was undertaken in December 2008 so as to review HNL’s social and environmental performance. As such, the review for this project was desktop. Documentation reviewed included:

- Various presentations on HNL’s current operations and including internal Company plans and procedures on environmental and social management;
- The Environmental and Social Review Summary for the current investment and related background information
- The IFC supervision report dated December 2008
- Information Memorandum for a Capital Raise by Hygeia Nigeria Limited, prepared by Liquid Africa Limited, April 2009
- HNL’s response to a request for supplementary information for compilation of this document

Project description

This project involves an investment in Hygeia Nigeria Limited (hereafter referred to as “HNL” or “the Company”) so as to expand their existing healthcare operations within Nigeria. HNL is an integrated health care company offering both hospital and health maintenance organization (hmo) services to the formal sectors of Nigeria. The Company owns and operates three Lagoon Hospitals in Apapa, Ikeja and Victoria Island. In addition, HNL manages 14 worksite clinics and provides health management cover for over 250,000 lives through a network of over 1400 clinics and hospitals throughout Nigeria.

This is a repeat investment by IFC in the Company. IFC initially invested in HNL in 1999 through the African Enterprise Facility and this project is now complete. Subsequent to this, in 2007 IFC undertook a further investment in HNL to facilitate renovation and expansion of the hospitals, assist with implementation of information technology system, refinance debt and provide working capital. This investment is still in progress.

The proposed IFC investment is for an amount of up to $5 million to finance: (i) construction of a new 30-bed hospital on a site still to be identified in Lagos; (ii) construction of an oncology centre at one of its expanding in Lagos, including an additional 20 beds; and (iii) an upgrade of the Company’s existing information technology systems.

Identified applicable performance standards

While all Performance Standards are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards:

- PS1: Social and Environmental Assessment and Management Systems
- PS2: Labor and Working Conditions
- PS3: Pollution Prevention and Abatement
- PS4: Community Health, Safety and Security
- PS5: Land Acquisition and Involuntary Resettlement

Performance Standards 1-4 apply to all of HNL’s existing activities, including those associated with the current project. When HNL’s activities were previously reviewed for purposes of IFC’s current investment, it was determined that PS 5 was not applicable to any of the existing developments. Insofar as the new investment is concerned, PS 5 may apply to land still be identified and required for the new hospital facilities. This will be verified once the site locations have been defined. Given the existing facilities are located in the developed urban areas of Lagos, it was equally determined that PS 6: Biodiversity and Natural Resource Management did not apply to those developments. While unlikely given land for the new / expanded facilities is within well developed urban areas, the applicability of this Performance Standard to the new sites will be verified during the land acquisition process. PS 7 Indigenous Peoples does not apply because there are no people fitting the definition of an Indigenous People in PS 7 living near the project. PS8: Cultural Heritage may apply to the new hospital sites; this will be determined once suitable land has been identified.

Environmental Health & Safety (EHS) Guidelines applicable to this investment include:

- The General EHS Guidelines (April 2007)
- EHS Guidelines for Health Care facilities

Environmental and social categorization and rationale

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects due to the limited number of site specific environmental and social impacts that may occur and which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.

Potential impacts associated with HNL’s existing operations are typically site specific and the Company is implementing appropriate actions so as to manage environmental and social performance in accordance with IFC requirements. This will be further reinforced through the Environmental Action Plan (EAP) for this Project. Impacts resulting from the new developments are associated with the construction of the new hospital facilities in Lagos. Thus, the potential environmental and social impacts are limited and generally site specific, while there will be positive benefits as the number of hospital beds in Lagos will be increased, along with access to health insurance in Nigeria.

Mitigation measures to negate the potential impacts, largely environmental, have been defined and are provided in the attached EAP.

Key environmental and social issues and mitigation

PS1: Social and Environmental Assessment and Management Systems:

The Company is undergoing an intensive quality improvement programme with the objective of achieving certification of their two existing hospitals by the Joint Commission International (JCI), which is the international branch of the Joint Commission on Accreditation of Healthcare Organizations (JCAHO). Joint Commission International helps to improve the quality of patient care in many nations. HNL’s current implementation schedule indicates certification will be obtained by October 2010. The intention is to also obtain certification for the new hospitals in Lagos and, once the development plans for this facility have been finalized, an implementation schedule will be defined. Equally, this is a requirement as defined in the EAP.

As part of the certification initiative, HNL has compiled a Health, Safety and Environment Policy which defines the responsibilities for relevant personnel and how key issues such as waste management, potable water and life and fire safety are managed. So as to give effect to the policy, there are documented procedures for key operational activities. This systematization of operations provides a management system for all aspects of HNL’s health care facilities. Supplemental, supporting aspects of the management program include offering quality certification classes to all staff. HNL encourages all professional staff to obtain the title of Certified Professional in Health Care Quality, a US Board Examination. In further coordination with Apollo, HNL has formed a number of committees oriented to assessment and monitoring of specific health care activities to ensure that ongoing performance adheres to written documentation of Company processes and procedures. The committees at present include Planning and Therapeutics, Medical Records Review, and Infection Control and Occupational Health and Safety.

Environmental review and permitting for the new hospital facilities falls under the aegis of the Operations Manager. So as to obtain a permit for the expansion, the Company is required to submit an application to the Lagos Urban Planning Unit for an “Alteration of Use Permit”. The Unit then reviews drawings and determines if there are environmental impacts associated with the proposed expansion or alteration of facility use. When the review is complete and required modifications have been incorporated into the design, the permit is issued. Permits must be visible throughout the construction period. A post construction inspection will be performed by the Unit to ensure that the structures were constructed in accordance with approved designs and the permits.

HNL will need to identify land required for the new hospital facilities that are already zoned for such development given Lagos State’s strict zoning laws.. Should an Environmental Impact Assessment be required for the new facilities in terms of the Environmental Impact Assessment (EIA) Decree of 58 of 1992, this would need to be completed and submitted along with the building plans in order to obtain approval.

Through existing communication channels with the ) Residents Association, HNL will explain the scope of the expansion activity for the facility located in this area and present potential impacts and mitigation measures to the host community. Similarly, HNL are required to engage other relevant GRAs and/or other community organizations to explain the new development at the identified location, once the location has been confirmed and the development approved. These engagement measures will be conducted to ensure that each community understands potential expansion / development issues and mitigation measures, and is afforded the opportunity to express perceived issues and concerns.

In compliance with the attached EAP, HNL will continue to strengthen its management system by expanding the scope of their written procedures to address operational activities and ensure these are in compliance with IFC requirements. In addition, so as to improve the monitoring and reporting system, where monitoring reports indicate higher than acceptable levels for parameters with potential health-related consequences, such as potable water, these will be brought to the immediate attention of senior management.

PS2: Labor and Working Conditions:

HNL has a Group Manager for Human Resources and has developed a Staff Handbook to explain employment rights and non-specific wages and benefits information. Wage and benefit information are defined in each letter of employment. The Staff Handbook is made available to all employees and is updated periodically. Salary ranges are reviewed and updated annually based upon a survey, which is either conducted by the Human Resources Manager, or externally commissioned. The Staff Handbook incorporates an employee grievance mechanism. Given that HNL routinely seeks and hires highly qualified professionals, there are no labor organizations to coordinate with and there are no collective bargaining agreements. Employment is offered to individuals in accordance with the terms of employment in the Staff Manual and in position-specific appointment letters. Selection criteria for employment include appropriate job requirement credentials and successful interviews. No individuals are hired under the age of 18, which is the minimum age for employment in Nigeria. There are no discriminatory practices in hiring, however state law requires that employees meeting other job requirements pass a medical examination.

HNL hospitals are regulated and certified by the State Hospital Management Board. Each facility is subject to an annual review that constitutes a validation exercise to confirm continuing quality operations. Credentials for the physicians and nurses are checked by the Human Resources Manager. Positive results from the annual review and credential certification result in awarding of a Certificate of Practice for the operation.

A number of labor and working conditions considerations are addressed through existing committees and activities aimed at improving quality, including occupational health and safety. However, there is no formalized occupational health and safety plan, although it is in the process of being finalized. As defined in the attached EAP, the plan and implementation thereof will be in accordance with the occupational health and safety section of the IFC General Environment Health and Safety (EHS) Guidelines.

PS3: Pollution Prevention and Abatement:

Potable water for all three existing operations is provided by the local utility, Lagos State Water Corporation. Given water service provision is intermittent at all three existing facilities, HNL facilities are required to be prepared for water outages. Recently the Apapa hospital installed a borehole to provide backup water supplies at the facility and the existing water treatment facility is being upgraded. The other facilities rely on water tankers in the event of an interruption in service provision.

When the municipal water service is operating, it flows to a primary cistern, is filtered and disinfected, prior to being pumped to supplemental storage tanks situated on the roofs or at higher levels. At the Apapa hospital, water samples are collected twice daily and analyzed by the laboratory located at Nigerian Breweries Limited. Water quality samples at the other facilities are collected by a private water services contractor, and then analyzed for physical, chemical and microbiological parameters. Water pressure loss in the mains supply may result in contamination flowing into the non-pressurized mains. In accordance with the EAP, HNL will ensure that supplemental disinfection capability is available for all water received, including that received after mains outages. In addition, a procedure will be compiled so as to ensure consistency for water quality monitoring at all facilities such that it is compliant with the World Health Organization’s requirements for such.

Sanitary wastewater at all three facilities is currently discharged into underground concrete storage tanks, collected by a private contractor, and transported to the Nigerian Cleaning Service, a Lagos State government sanitary sewage treatment centre situated on Victoria Island. In accordance with national legislation, given the volumes of wastewater being discharged at the Apapa facility, this needs to be discharged via a wastewater treatment plant. HNL have submitted the design for this facility to the relevant Lagos State authorities for approval and the plant will be operational by July 2009. Stormwater and air conditioning condensate and are evacuated through storm water drains servicing surface areas and the streets.

Within the individual facilities there is segregation of solid waste with color coded plastic bags used for differing wastes, while sharps (e.g. glass, needles, syringes, etc.) are collected in plastic containers. Thereafter, the waste is transferred to dedicated holding areas at which point management is outsourced to a private company. Individuals involved in this activity are trained in the hospital waste management procedures. There is a high level of awareness concerning HIV/AIDS transmission and thus preventive measures and attention to disposal is emphasized. The solid waste is transported by the contractor for disposal at facilities operated by the Lagos Waste Management Authority. This process will similarly apply to the new hospitals to be constructed.

Electric power is supplied to the three facilities by the Power Holding Company of Nigeria PLC; this will also be the case at the new facility. However, power outages are common in Lagos. Thus, local generation capacity is required. Generators use diesel fuel stored at the Apapa facility. Drums of diesel are filled from the principal storage tank at Apapa and transported to the other operations for use. The annual generation of CO2 equivalents for all three facilities via the national grid amounts to less than 2000 tons CO2/year; given the size of the new facilities, this figure will not increase by more several hundred tons/year. This total figure is well under the IFC threshold of 100,000 tons/year.

Improved management of all hazardous materials and waste will be further defined in the existing procedures, along with employee training, as defined in the EAP.

PS4: Community Health, Safety and Security:

HNL are in the process of conducting a review of the architectural designs to confirm compliance with international life and fire safety plans for the three existing developments, however these have taken longer than originally envisaged as the construction phase has been extended. As per the attached EAP, HNL are required to finalize the LFS design review at the existing facilities being expanded / renovated so as to confirm compliance with international standards. Thereafter, once the construction phase is complete, a review will be required to confirm construction in accordance with the designs. A similar approach has been adopted for the new facility.
Emergency response planning developed as part of the occupational health and safety plan and emergency response plan will coordinate essential activities with host communities to ensure adequate communication of potential emergencies and appropriate response activity. HNL employ a combination of subcontractor security services and direct hire employees to provide entry and exit and traffic control, personnel entrance, and internal security for building and contents. None of the security guards are armed; all internal and outsourced security services are advised to call the police in the event of any type of incident.

PS5: Land Acquisition and Involuntary Resettlement:

Land required for the new hospital facilities is still to be identified. Prior to any formal land acquisition process being finalized, HNL will confirm the land use associated with the respective sites, and inform IFC. Should physical or economic displacement be required, as defined in the EAP, HNL will then develop and implement a land acquisition procedure in compliance with this Performance Standard.

IFC PROJECTS

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